Monday 18 July 2011 09.26 EDT
First published on Monday 18 July 2011 09.26 EDT

Developers making social mobile games are currently spoiled for choice when it comes to potential sources of investment, but they must carefully scrutinise these opportunities for the strings that may be attached.

On Friday, US social games publisher CrowdStar partnered with startup incubator YouWeb for something called StarFund: a $10m fund that will invest up to $250k in individual social mobile game developers, while also helping them market their finished games and dig into the analytics of how people are playing them.

CrowdStar recently had a bona-fide iOS hit with Top Girl, a game that it says was downloaded more than one million times in its first 10 days on the App Store. StarFund is an attempt to identify and work with talented independent developers to build on this success over the coming months.

"YouWeb's mission is helping entrepreneurs build successful products and business models," said YouWeb founder Peter Relan – a man who has backed several notable gaming startups, including OpenFeint, iSwifter, Sibblingz and CrowdStar itself. "As such, StarFund is an ideal partnership for us, because ultimately the mobile entrepreneur wins."

It is no disrespect to StarFund to suggest that these entrepreneurs will want to be sure that this is correct. In this case, developers must submit their concepts up front, including the name of their proposed game, information on its goal and theme, its proposed business model and other details.

Before doing this, most will want to know how the investment will be structured, and how the resulting intellectual property and revenues will be divided once games are released. With competition in the funding space, the more information that is provided, the better.

In February this year, mobile gaming community MocoSpace launched its own $1m fund to invest in HTML5 mobile web games, as part of a drive to get more developers working with its MocoSpace Game Platform. In March, the first three developers got funding: New Game Town, Joyplay and Kooky Panda. In this case, developers interested in the fund were invited to email MocoSpace for more details, presumably including any questions about the strings attached to any investment.

MocoSpace isn't even the only company offering cash for mobile web games – SPIL Games has run its own contests for HTML5 developers, albeit at a lower level with a $50k prize fund. Back in the native world, publisher TinyCo launched a $5m TinyFund in May 2011, offering up to $500k per game, plus marketing and business assistance.

In March, OpenFeint partnered with Chinese publisher The9 to fund developers with a specific focus: porting iOS games to Android, and integrating the OpenFeint community service. At the LeWeb conference in December 2010, meanwhile, Japanese social games publisher DeNA's chief executive Tomoko Namba explained that the company was looking for partnerships and acquisitions in the social mobile games space, and stressed that this could include investments or pure marketing partnerships.

Finally, at the pricier end of the investment sector, US venture capital firm Kleiner Perkins Caufield & Byers has invested in several games startups from its iFund, including Booyah and ngmoco. Admittedly, at this level of funding, the terms are much clearer, although subject to negotiat

All this is without discussing traditional publishing deals, which don't always come from the usual suspects. Halo developer Bungie, for example, is turning mobile publisher with its Bungie Aerospace initiative, offering financial resources, but also PR and marketing, QA/testing, launch support and technical assistance. Mobile operator Orange also recently partnered with an indie studio, Bristol-based Mobile Pie, for the release of social music iPhone game My Star.

In short, there are more potential sources of finance for a developer with a good idea for a social mobile game than ever before. All have strings attached to a greater or lesser degree. Savvy developers know they need to ask plenty of questions before submitting their ideas. Less "show me the money", and more "show me the business terms and IP/revenue splits".